Who Will Win The Great Global Streaming Race? Apple Music Makes Moves On Spotify

A new report finds that Apple Music has a higher paid customer conversion rate than Spotify, and has beat out its competitor in three major markets including the U.S.

Ana Yglesias

GRAMMYs

Oct 1, 2018 - 4:10 pm

The race to win the hearts and minds of music listeners – and their streaming dollars – is one that has kept music streaming services competitive.It is ultimately what has led to fights on exclusive releases as well as to have the best original content, curated playlists and more. While Spotify is the service that radically shifted the way consumers listen to music since the platform's debut 10 years ago and is often cited by media as the streaming king, new numbers show that Apple Music is catching up, and perhaps taking over. A recent report showed that Apple Music has a higher paid customer conversion rate than Spotify, meaning they are turning more potential customers to paid subscribers. The reports adds to Apple's recent Q3 financial reports that the service is beating its competitor in total paid subscribers the U.S., Canada and Japan.

With his company Loup Ventures, tech analyst Gene Munster, recently released a case study about how iOS affects music streaming and found that Apple is converting potential customers to paid subscribers at a 2.5 times faster rate than Spotify currently is. Their research shows Spotify still dominating the overall global market with 62 percent of global paid streaming subscribers (between Spotify, Apple Music and Pandora) and while Apple Music may currently hold only 34 percent, Apple's share has been growing at a faster rate. The study took into account the addressable market for the streaming services, namely that Apple Music is primarily used on iOS devices with only a small segment of Android users, while Spotify can be used on either platform. Additionally, Digital Music News reported that Apple Music now has higher numbers of paid subscribers than Spotify in the U.S., Canada and Japan, which Tim Cook confirmed in Apple's latest financial report for Q3 2018. Munster estimated that Apple Music has 21 million subscribers in North America, while Spotify has 20 million.

Munster highlights the seamless nature of iOS integration as being an advantage for Apple, as Apple Music is preloaded on their devices and can be used across them, and they are also able to prompt users to start a free trial and subscribe. He points to this as playing a big part in their conversion rate, in addition to iPhone users tending to have a higher disposable income. This may just be the tip of the iceberg. As the study shares "Apple Music has room to grow with just 45m subs out of 780m active iPhone users (6%) paying for the service."

While both services offer student, family and individual subscription rates at the same price point, only Spotify offers a free option. Spotify Free has ads and doesn't allow for on-demand listening like their Premium subscription, but it does allow for Spotify to potentially reach more users and also target them to convert to paying customers. The only free option on Apple Music is for the initial free trial, and users must then pay to keep listening with the service, which could possibly be an incentive when deciding to pay or not. As with most free trials, for both services the card on file will be charged if it is not canceled before the end date, but, as Munster points out, it is even more streamlined with Apple Music for iOS users, as it is all linked to your Apple ID.

The family plan option on Spotify may be cutting into their numbers, as up to six users can share a family account instead of paying for their own individual accounts. Digital Media News also reported that Spotify made a recent attempt to crack down on overuse of family plans after recent findings that of just 35 percent of Spotify users that pay for a Premium plan, 24 percent of them are on a family plan. Spotify reportedly sent emails to those on family plans asking to verify their GPS location to confirm that all users live in the same house, but due to backlash they decided to hold on following through with the request. Apple Music's family plan option is an extension of its Family Sharing functionality, meaning all users on the plan have to be linked to one credit card for all users Apple ID purchases, reducing the appeal to share such a plan with friends and extended family like many Spotify users clearly do.

At the end of the day, most music listeners are looking for access to all of the music they want to hear, and an ease of use in their ability to stream on their devices, have access to new releases, create playlists and perhaps find new artists or exclusive content. Spotify has been in the streaming game longer and does a great job at curating tailored playlists for both the individual users and for different genres and moods, but perhaps Apple Music now has a leg up in pushing its streamlined, easy to use functionality on music listeners not yet paying for or committed to a specific service. It would be interesting to see if new data suggests that not having a free use option has a positive effect on paid subscribers, and how that may impact streaming options moving forward. For now not having a free option, as well as having a more restricted family plan may likely allow Apple Music to keep gaining traction on Spotify.

Apple Music Removes In-App Social Sharing Function

The streaming platform notified musicians they are taking away the Connect feed, launched in 2015 for artists to share content with fans

Ana Yglesias

GRAMMYs

Dec 13, 2018 - 6:16 pm

Apple Music has reportedly sent artists an email to notify them that the Connect social sharing feed is being phased out and they would no longer be able to use it to share content with fans. Instead, streamlined artist pages on the platform will feature new design and functionality.

As reported by Variety, Apple initially unveiled the Connect function with the launch of Apple Music (its debut into music streaming) in 2015 as a way for artists to share content directly with fans in the platform, yet "saw less traction from artists than Apple had anticipated."

As 9to5Mac, the Apple-centric site who shared the message sent to artists, pointed out, Connect was popular with artists upon Apple Music's launch, but its popularity quickly dropped off. They highlighted that many artists only have posts from several years back, consequentially pushing Apple to shift focus away from it, moving it from its own visible tab within the app to a more hidden location below music recommendations and playlists.

9to5Mac shared the content of Apple Music's email, which included the following: "We're always looking for ways to enhance our focus on artists and help them better connect to fans. So we've given Artist Pages an all-new design and added new, personalized Artist Radio."

While Connect was originally billed as a way for artists to share special content with their fans, the popularity of other preexisting social platforms like Twitter and Instagram likely had an impact on its popularity.

It sounds like Apple Music, which has recentlymade major moves on its main competitor Spotify, is helping perfect the craft of music discovery and artist-fan connection in the music-streaming arena.

Apple To Expand Austin Presence With $1 Billion Campus

The tech company announced plans to build a new office in the Texas capital that will add 5,000 jobs, as well as new, smaller offices in other U.S. cities

Ana Yglesias

GRAMMYs

Dec 13, 2018 - 2:48 pm

This morning, on Dec. 13, Apple announced plans to expand its already large presence in Austin, Texas with a new 133-acre campus less than a mile from its existing 6,200-person campus.

The new office will allow the tech company to employ 5,000 more people, "with the capacity to grow to 15,000," in the music-centric city that is already home to its biggest employee base outside of its Cupertino, Calif. headquarters.

Apple ❤️ Austin! Proud to announce our newest campus there, along with plans for new sites in Seattle, San Diego and Culver City, CA as Apple expands operations and creates thousands of jobs across the US.https://t.co/f2UwlXW2Hk

In addition to increasing its employment capacity in Austin, Apple also is planning to create more jobs across the U.S. over the next three years, with new 1,000-person offices in Seattle, San Diego and Culver City, Calif., a doubling of its Miami office, plus hundreds of additional jobs in other cities.

The company also noted that the Austin expansion is projected to make them "the largest private employer" in the capital city of Texas. The city's mayor commented on the positive relationship between Austin and Apple, highlighting the "creative spark" both share.

"Apple has been a vital part of the Austin community for a quarter century, and we are thrilled that they are deepening their investment in our people and the city we love," said Austin Mayor Steve Adler. "Apple and Austin share a creative spark and a commitment to getting big things done. We share their commitment to diversity and inclusion."

A partnership between a creative city like Austin, the self-appointed music capital of the U.S., and a company like Apple, whose innovation and influence doesn't limit itself to just the tech arena, sounds perfect. Each spring, Austin invites rising stars and established greats in tech, film and music to South By Southwest, whose festivals, including the world-renowned SXSW Music Festival, take over the town for well over a week.

Apple Music, since its growth and genesis from iTunes, which changed the music-listening game when it originally launched in Jan. 2001, has always been a friend of—and power-player in—the music industry. For music fans, iTunes allowed its users to create and share all the playlists their hearts desired, and now, with Apple Music, fans' access to specially curated playlists is next level.

Your Favorite Artists Will Follow You To The Polls Thanks To State-Specific Playlists

How one music streaming service is encouraging its users to vote in their local midterm elections on Tues. Nov. 6 with curated state playlists "to take to the polls"

Ana Yglesias

GRAMMYs

Nov 5, 2018 - 6:09 pm

With U.S. midterm elections happening nationwide tomorrow, Nov. 6., many musicians and other public figures have taken to social media over the past several weeks to encourage and remind their fans to vote. Spotify has recently joined the charge with their "Get Vocal" playlists curated for listeners across all states and territories.

On Tues. Oct. 30, a week out from election day, Spotify launched a new series of playlists, not to help listeners discover new artists or set a nostalgic vibe like their usual playlists do, but to encourage them to get out and vote. All U.S.-based users age 18 and up who used the app received a notification about their state's playlist, each titled "Get Vocal, [state]!" with a description reading "Songs uniquely popular in your state to take to the polls" and a hyperlink to the Voting Information Tool, powered by Google to help voters find their polling location. According to Billboard, Spotify users will also receive a reminder when the open the app on Nov. 6 with a link to the same site.

As of March 2018, 29 percent of Spotify users in the U.S. are between 25-34 years old, followed by 26 percent between the ages of 18-24 years old, according to Statista. Because only 16 percent of Americans between the ages of 18-24 voted in the last midterm elections, there has been a larger push this year to get more people to the polls, especially young people. Many artists, including John Legend and Linda Perry, who recently wrote and shared a song and campaign called "#GetUpandVote" just for the occasion, along with Rihanna, Chance The Rapper, Common, Alicia Keys and plenty of others who are using their platforms to encourage more young people to the polls this year.

As Rihanna recently tweeted, "I don't care what responsibilities you have today. There's no greater responsibility than being in control of your future and it starts NOW!!"

Visit gettothepolls.com to find out where to make your voice heard and vote in your local midterm elections.

Report: Apple Music's U.S. Growth Rate More Than Doubles Spotify's

Streaming music is strong overall as Apple Music looks set to take U.S. top spot sometime over the summer

Philip Merrill

GRAMMYs

Feb 5, 2018 - 11:26 am

On Feb. 4 The Wall Street Journal fueled speculation that the U.S. growth rate for Apple Music's paid subscriptions is on track to make it the top premium streamer in the country by this summer. Estimating monthly growth of Spotify paid subscribers in the U.S. at 2 percent versus Apple Music at 5 percent, the projection predicts a clear win for Apple before fall.

Spotify's worldwide base of 70 million paid subscribers does not look like it's in range for Apple yet, which started 2018 from a global base of 36 million subscribers. On the other hand, Apple Music is available in more than 100 countries while Spotify only reaches around 60. From the music industry perspective, strong growth from both services is a good thing.

Looking at the contrast between the two services in more detail, Spotify had invested years establishing itself as an easy alternative to free. Before paid streaming gained strength, the big question was whether consumers would be willing to pay at all. That question has already been answered, leading to these strong competitive numbers.

The question Apple Music has been answering goes beyond the premium service component to the other gear Apple sells that are designed to work together for a seamless interactive experience. The hope was that loyal Apple fans would sufficiently appreciate the benefit of Apple's premium service, optimized for its technological ecosystem, to pay for it. The answer is yes, again.

So far this streaming race seems like a win for consumers whether Apple Music overtakes Spotify this summer or not. We can hope by the time students go back to school in the fall that the big question will be why would anyone want to pay for only one streaming music service when they are a good deal, financially, and each service strives to offer its own unique advantage?

Some of the content on this site expresses viewpoints and opinions that are not those of the Recording Academy. Responsibility for the accuracy of information provided in stories not written by or specifically prepared for the Academy lies with the story's original source or writer. Content on this site does not reflect an endorsement or recommendation of any artist or music by the Recording Academy.